How to decide when to buy a foreign currency

mct1 said:
So basically if you choose a higher than current rate you'll have to wait for your "offer" to be matched. When your chosen rate is matched you'll automatically get your exchange at that rate. Since currency rates go up and down all the time your rate will inevitably be matched sooner or later - that's our experience anyway. Obviously you may want your money sooner, in which case you'll want to revise your choice to a lower rate or decide to take the current rate for an immediate exchange. Your original money's always there until it's exchanged.
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If I read correctly Currency Fair charges a 0.45% commission whereas something like BoI will charge 0.2% commission plus a margin.

Are you sure you are systematically getting a better rate than you would via a regular bank?
 
NoRegretsCoyote said:
If I read correctly Currency Fair charges a 0.45% commission whereas something like BoI will charge 0.2% commission plus a margin.

Are you sure you are systematically getting a better rate than you would via a regular bank?
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Pretty sure. I don't dispute those figures, I've seen them too, so it's a valid question. They should equate so people can make a fair comparison but they don't. Let's just compare £10,000 exchanged by CF vs BOI at close of markets on Friday.

In the CF rate table example I showed earlier, £10k at the current market rate = €11,295. Minus €3 transfer fee €11,292 goes into BOI. A higher rate could easily give me €11,350 48hours later. Again, I know that from my experience. These figures you see are what you get, there's no catch.

Now here is the BOI Foreign exchange currency converter from Friday, set to receive an international transfer of £10k. As you see €11,181 goes into my BOI account. I think there's a fee on top but as I'm not sure we'll ignore that.

53C02458-8414-4204-B3AF-1AA1984F4762.png

So when the CF current market rate gives me a minimum of €110 more why on earth would I accept BOIs awful exchange rate? HSBC's is even worse. It's been interesting for me to look into what and why I use CF and now I'm more sure than ever it was a good move. I hope the OP has gleaned something from this discussion too. I've said enough now.
 
Great input guys, I just wanted to better educate myself on these things. Since the likes of TransferWise no longer offer an email alert when exchange rates reach a 2-week high, can someone perhaps explain how one would work this out for themselves? Is it just a matter of finding out what last week's high was and then setting an alert for a figure that's higher than that? For example, last week's high was 1.1479 so in order to be notified of a 2-week high would I just set an alert this week for 1.1480?
 
PoundMan said:
Is it just a matter of finding out what last week's high was and then setting an alert for a figure that's higher than that? For example, last week's high was 1.1479 so in order to be notified of a 2-week high would I just set an alert this week for 1.1480?
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You could do that, certainly, but it seems like in theory you might end up setting new alerts every other day should the rate keep rising. You might consider changing your approach and signing up for a specific, more ambitious rate alert - for example you could choose the three month high which was 1.1650 on Dec 2nd, or something else in between. Just a thought. I don't use rate alerts myself but maybe I should.

Btw free currency apps like Xe will set rate alerts for those not registered with a money transfer site.
 
In the past 12 months, the EUR/GBP rate has fluctuated betweena low of 0.82 on 4th March 2022 to a high of 0.90 on 24th Sepptember 2022

So if you can afford to wait for the proceeds, yes, you can "speculate" that the rate will improve in the next few days or weeks

It is as likely to go down as to go up, so the time taken to reach your target will vary from 0 to whenever. Statistically, it will reach your target at some date as the fluctuations are random
Here's a graph of the closing exchange rate over the last 5 years
1672227374346.png
 
mct1 said:
You could do that, certainly, but it seems like in theory you might end up setting new alerts every other day should the rate keep rising. You might consider changing your approach and signing up for a specific, more ambitious rate alert - for example you could choose the three month high which was 1.1650 on Dec 2nd, or something else in between. Just a thought. I don't use rate alerts myself but maybe I should.

Btw free currency apps like Xe will set rate alerts for those not registered with a money transfer site.
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The money needs to go from my UK bank account into my Irish bank account before January 1st, so I probably have little choice but to just accept the current rate. But definitely next year when transferring another lump sum I will try to be a little more strategic about things.
 
You'll
PoundMan said:
The money needs to go from my UK bank account into my Irish bank account before January 1st, so I probably have little choice but to just accept the current rate. But definitely next year when transferring another lump sum I will try to be a little more strategic about things.
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Tomorrow morning then to be on the safe side. Ah well, next time you can be prepared.
 
mct1 said:
Pretty sure. I don't dispute those figures, I've seen them too, so it's a valid question. They should equate so people can make a fair comparison but they don't. Let's just compare £10,000 exchanged by CF vs BOI at close of markets on Friday.

In the CF rate table example I showed earlier, £10k at the current market rate = €11,295. Minus €3 transfer fee €11,292 goes into BOI. A higher rate could easily give me €11,350 48hours later. Again, I know that from my experience. These figures you see are what you get, there's no catch.

Now here is the BOI Foreign exchange currency converter from Friday, set to receive an international transfer of £10k. As you see €11,181 goes into my BOI account. I think there's a fee on top but as I'm not sure we'll ignore that.

View attachment 7011

So when the CF current market rate gives me a minimum of €110 more why on earth would I accept BOIs awful exchange rate? HSBC's is even worse. It's been interesting for me to look into what and why I use CF and now I'm more sure than ever it was a good move. I hope the OP has gleaned something from this discussion too. I've said enough now.
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That's the exchange the bank charges to the occasional foreign exchange customer. If you do any regularity of transfers you can negotiate a margin over mid point.

I'm with AIB and have a 0.3% margin on sterling transfers + €15 fee. It's programmed into the online system, so automatically applies.

I don't do huge transfers - it was circa £300k a year when it was first negotiated.
 
Within the banks, they’ve a technical term for people who speculate on currencies.

It’s ‘idiots’.
 
mct1 said:
Tomorrow morning then to be on the safe side. Ah well, next time you can be prepared.
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@mct1 I'll be doing another transfer again from GBP to Euro in 2023 but this time I have the advantage of being able to wait the full year on a particular rate. Should I settle for something like £1=€1.17 which was the average for 2022 or should I be aiming for something more ambitious like £1=€1.21 which was the highest in 2022?
 
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You might as well ask
Nearly Perfect is running in the 3pm race in Plumpton today - odds of 15/2 - should I back it ?
 
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